Daily Digest

Daily Digest - July 27

Monday, July 27, 2009, 10:51 AM
  • Congressman Grayson Interview (Audio)
  • Six Georgia Bank Failures, US Tally 64 for 2009
  • Hugh Hendry: China – The Emperor has no clothes (Video on page)
  • Uncle Buck (Chart)
  • Cash for Trash, Transparency & Accounting (Video)
  • High Frequency Trading (Video)
  • "Obscure" Websites Now Have the Best Info (White Paper)
  • The 2000s depression in one picture (Chart, H/T Russel)
  • A Tale of Two Depressions (H/T Russel)
  • British economic collapse rivals Great Depression (H/T Russel)

Economy

Congressman Grayson Interview (Audio)

6 Georgia Bank Failures, US Tally 64 for 2009

State Bank and Trust Company, Pinehurst, Georgia, Assumes All of the Deposits of the Six Bank Subsidiaries of Security Bank Corporation, Macon, Georgia

Hugh Hendry: China – The Emperor has no clothes (Video on page)

Uncle Buck (Chart)

Cash for Trash, Transparency & Accounting (Video)

High Frequency Trading (Video)

Getting a look at orders before someone else does is commonly called "cheating". The National Market System (NMS) was supposed to prevent that; this was the so-called "innovation" of Nasdaq, remember? No specialists, no balancing of orders to open a stock, all done by computer. Equality of access. Up until it became profitable to make some people more equal. The intent of a public stock exchange is to insure equality of access to information so that the markets are orderly, not rigged.

"Obscure" Websites Now Have the Best Info (White Paper)

The 2000s depression in one picture (Chart, H/T Russel)

A Tale of Two Depressions (H/T Russel, Charts, Repost)

British economic collapse rivals Great Depression (H/T Russel)

"The financial crisis has been much bigger [than in the 1930s], the period of boom beforehand was more marked; and so you might think it's thanks to the policies [from the Bank of England and Government] that we'll end up with something slightly less bad but along similar lines."

25 Comments

Davos's picture
Davos
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Re: Daily Digest - July 27

Observation on how times have changed:

I have a confession, last night I cheated, I turned on the TV in the master of the house we are staying in at Block Island. When I flew, I used to unplug the TV when I got to the hotel room. Last night I wanted to watch a movie in bed, I was read out and we exhausted our NetFlix.

I was shocked, the Chanel selection started at at 100 and ended at 800! Are there really that many Chanel's????

Nothing was on but, surfing my way through the guide I saw a program how to make money on foreclosed property. When we built our home in 2006 we had cable at the rental, once or twice I would turn it on and peek at the History Chanel and on my way there I saw a show on flipping properties.

Here we are in 2009 and we have gone from how to buy a depressed property, pretty it up and make 50k-150k to how to make 2k-10k on a repo?!?!

The author of the $19.95 book got clicked off when Hugh Hendry's quote flashed into my mind, "Only monkey's pick their bottoms". Yup, Mr. $19.95 author said, "You can make money now that real estate has bottomed." I clicked it off, I had just been on Zero Hedge and seen the chart of vacancies.

The TV is now unplugged and will stay unplugged until we leave this weekend!

Take care

hucklejohn's picture
hucklejohn
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Re: Water shortage

See this link concerning water shortage in California'a Central Valley: 

http://thecomingdepression.blogspot.com/2009/07/there-is-hunger-coming-like-run-away.html

One commenter suggested the water shortage is related to protecting the smelt (fish) up in the Delta region.  Can anyone confirm (or deny) the facts concerning this water shortage story?

Davos's picture
Davos
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Re: Daily Digest - July 27

Hello HuckleJohn:

Not certain of the location but there were 2 pieces, one was on the inflation.us blog on farming and I believe there was some mention on water and the other I saw was on the coming depression. If I recall correctly one of them mentioned the water situation and I think mentioned fish.

I know in the Atlanta area they flood a river to provide shell fish for the coast of Floridia, my inlaw can't wash his Jaguer or water his sod do to the conservation.

Take care

SagerXX's picture
SagerXX
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I'd love to be a fly on the wall...

...in the room where the US & China are meeting today.  What do you suppose they're discussing?  The length of our leash?  

 

SteveS's picture
SteveS
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The big print giveth

 

New Home Sales Surge 11 Percent in June

  but the small print taketh away:

But sales were still down 21.3 percent compared with the same period last year.

(quotes from Washington Post, 27jul09)

brjohnson789's picture
brjohnson789
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Re: Daily Digest - July 27

Hello, I thought this was an interesting article about how it seems even more jobs are being lost during this recession than there should be, according to "Okun's Law".  Okun discovered a mathematical relationship between output declines and rise in unemployment, and this relationship has helped predict how many jobs would be lost in past recessions pretty accurately.  Unfortunately it seems significantly more jobs are being lost this recession than there should be, based on output declines. 

 

http://www.nytimes.com/2009/07/26/magazine/26FOB-WWLN-t.html?_r=1&ref=magazine

 

lucky's picture
lucky
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Re: Water shortage

This in a fact, the entire valley is dying because of the shutdown of the aquaduct by congress. Expect food prices to shoot to the moon.

http://www.foxnews.com/search-results/m/22257556/fish-or-famine.htm

WATCH the video, only 4:47 long.

SagerXX's picture
SagerXX
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Re: The big print giveth
SteveS wrote:

 

New Home Sales Surge 11 Percent in June

  but the small print taketh away:

But sales were still down 21.3 percent compared with the same period last year.

(quotes from Washington Post, 27jul09)

It amazes me even now that people can't cotton on to the fact[s] that actually matter[s].  Good grief.

And respect to Steve for the Tom Waits reference!

Viva -- Sager

Farmer Brown's picture
Farmer Brown
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Re: Daily Digest - July 27

Max Keiser doesn't mince words in this onslaught of Goldman, Treasury and the Fed:

Strabes: Is your real name, "Max Keiser"?  Kidding of course (and meant as a compliment)! 

 

 

Davos's picture
Davos
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Re: Daily Digest - July 27

Hello Patrick:

I especially liked the 1:02 minute point of video 2. I didn't realize it would be that long....time to extend my puts. Take care

rowmat's picture
rowmat
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Re: Water shortage

How many here are aware of the California Water Wars?

Wikipedia - California Water Wars wrote:

The California Water Wars describes the disputes between Los Angeles, California and the Owens Valley over water rights. The disputes stem from Los Angeles's location in a semi-arid area, and the availability of water from Sierra Nevada runoff in the Owens Valley..."

"...The water wars began when Frederick Eaton was elected mayor of Los Angeles in 1898, and appointed his friend, William Mulholland, the superintendent of the newly-created Los Angeles Department of Water and Power (LADWP)..."

"...Eaton and Mulholland had a vision of a Los Angeles that would become far bigger than the Los Angeles of the turn of the century. The limiting factor of Los Angeles' growth was water supply. Eaton and Mulholland realized that the Owens Valley had a large amount of runoff from the Sierra Nevada, and a gravity-fed aqueduct could deliver the Owens water to Los Angeles..."

"...At the turn of the century, the United States Bureau of Reclamation was planning on building an irrigation system to help the farmers of the Owens Valley. However, the agent of the Bureau was a close friend of Eaton, so Eaton had access to inside information about water rights. Eaton bought land as a private citizen, hoping to sell it back to Los Angeles at a vast profit. Eaton claimed in an interview with the Los Angeles Express in 1905 that he turned over all his water rights to the city of Los Angeles without being paid for them, "except that I retained the cattle which I had been compelled to take in making the deals ... and mountain pasture land of no value except for grazing purposes."

"...Eaton lobbied Theodore Roosevelt and got the local irrigation system cancelled. Mulholland misled residents of the Owens Valley, by claiming that Los Angeles would take water only for domestic purposes, not for irrigation. By 1905, through purchases and bribery, Los Angeles purchased enough water rights to enable the aqueduct. Many argue that Los Angeles paid an unfair price to the farmers of Owens Valley for their land. Farmers that resisted the pressure from Los Angeles until 1930 received the highest price for their land; most farmers sold their land from 1905 to 1925, and received less than Los Angeles was actually willing to pay..."

"...The aqueduct was sold to the citizens of Los Angeles as vital to the growth of the city. However, unknown to the public, the initial water would be used to irrigate the San Fernando Valley to the north, which was not at the time a part of the city. A syndicate of investors (again, close friends of Eaton, including Harrison Gray Otis) bought up large tracts of land in the San Fernando Valley with this inside information. This syndicate made substantial efforts to the passage of the bond issue that funded the aqueduct, including creating a false drought (by manipulating rainfall totals) and publishing scare articles in the Los Angeles Times, which Otis published..."

If you haven't yet seen one of the best movies of all time do yourselves a favor and see 'Chinatown' with Jack Nicholson. Chinatown is based upon the California Water Wars and the corruption that was behind them.

Wikipedia - Chinatown wrote:

"...The characters Hollis Mulwray and Noah Cross are both references to the chief engineer for the Los Angeles Department of Water and Power, William Mulholland (1855-1935) — the name Hollis Mulwray is partially an anagram for Mulholland. The name Noah is a reference to a flood — to suggest the conflict between good and evil in Mulholland. Mulholland was the designer and engineer for the Los Angeles Aqueduct, which brought water from the Owens Valley to Los Angeles..."

rowmat's picture
rowmat
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Re: Water shortage - Now this is FREAKY!!

For those who have seen 'Chinatown' check out the guys name in the Fish & Famine Video at 2:19

The water is being diverted and dumped into the ocean... just like it was in Chinatown.

Davos's picture
Davos
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hucklejohn's picture
hucklejohn
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Re: Daily Digest - July 27

Thanks Lucky for the link to the FoxNews video on the California Central Valley water diversion from  the farmers to the smelt (fish).   I live in Southern California and was unaware of this issue.

ernie's picture
ernie
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Re: Daily Digest - July 27

An interesing opinion piece on the global finacial crisis from Australian Prime Minister Kevin Rudd in yesterdays Sydney Morning Herald:

 

http://www.smh.com.au/national/pain-on-the-road-to-recovery-20090724-dw6...

He seems to have a bit of insight into the causes of the current crisis.

There is a good followup to the article on Professor Steven Keen's "Debtwatch" blog:

href=/comment/12869#comment-12869

 

 

 

Woodman's picture
Woodman
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Re: Daily Digest - July 27

Hey Davos, good job unplugging the TV.  Chris and Becca emphasized the importance of this at the Rowe seminar.  I've never owned one and don't miss it a bit.

Tom

 

Davos's picture
Davos
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Re: Daily Digest - July 27

Hello Tom: Really nice to know I'm not alone, take care

Sandman3369's picture
Sandman3369
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Re: Daily Digest - July 27

Since moving me and mine out in the "boonies" a month ago.... I don't see that any of us are missing the 'boob' tube at all! You guys on the right coast must not be that bad after all! BTW, I hear the humpies are going to run strong next week...

mainecooncat's picture
mainecooncat
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Re: Daily Digest - July 27

Just to chime in here on the boob tube or idiot box. Seems to me nowadays the worst thing on is the advertisements, far more destructive than the actual content of the programming. It's where the real "programming" takes place -- look like this, take these drugs to suppress reality, if you don't buy this you're not cool, etc.

Sandman3369's picture
Sandman3369
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Re: Daily Digest - July 27

I agree. Is it just me or is everyone getting a wierd grey crosshatch pattern now?

ckessel's picture
ckessel
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Re: Water shortage
lucky wrote:

This in a fact, the entire valley is dying because of the shutdown of the aquaduct by congress. Expect food prices to shoot to the moon.

http://www.foxnews.com/search-results/m/22257556/fish-or-famine.htm

WATCH the video, only 4:47 long.

Lucky,

There is a bit of a spin on this story and it is not quite factual. Note that earlier in the interview it was mentioned that this project was completed in 1968 yet "three generations of farming families could be wiped out". The California Aqueduct Project along with the I-5 interstate highway project (completed circa 1972) was a grand plan to bring prosperity to the west side of the Central Valley which lies in the shadow of the Coastal Range and is fairly arid. The farming done their was largely dry land framing and grazing. The advent of a new Federal Water project meant that previously marginal land would be worth millions if put into orchards and intensive agriculture. Many of the older and smaller ranchers sold out to large agribusiness entities who had insider info on the coming of the water and access to lucrative water rights. There would also be opportunity to convert farmland to commercial business ventures along the new interstate highway corridor.

My wife's family who has farmed Californias' Central Valley since the 1920s was very familiar with this process and my father in law worked as a land surveyor on this project for years as it progressed from the Delta, South through the valley and across the Tehatchapie Range and into Los Angeles. There are many true stories of what happened as this project progressed. It really was all about Los Angeles needing water to expand as a city (in a desert) and having the population and money to be able to take what they needed from the north state.

What is not reported is that while there are reductions in water to the farmers, you still don't see any rationing in Los Angeles. Hopefully, before this event is over, the city dwellers will convert their lawns to gardens and at least make better use of the water that continues to flow down this aqueduct and provide them with cheap water. The farmers of the west valley have been squeezed out for the moment. But that land has always been comparitively marginal anyway. The real issue here is to find an environmental reason to cut water flows to all except the higher paying city customers and then use the debacle to justify construction of a new dam on the last major river flowing out of the Sierras .....the American River. Then there will be even more water for thirsty LA.

Meanwhile, the majority of the Central Valley agriculture which is not and has never been supplied water by this project is doing fine with a near normal rainfall season. The croplands mentioned around Modesto where I-5 moves back into more populated areas get water from the Tuolumne River system (third largest in the state with a watershed beginning in Yosemite National Park and providing most of the water to the Bay Area). Drive down Hwy 99 and you will see a different picture of our cropland.

What is less known is the effect that diverting huge quantities of water to Southern California had on the San Francisco Bay and Delta Ecosystems. Long gone are the clean waters of the bay and delta, the flushed out rivers (of silt and debris) and the Salmon which used to have runs into the Sierra Nevada river systems from Redding to Fresno. The Stanislaus River had a count of about 125 Salmon last year, down from many thousands when I was a Boy Scout!

The point here is how human population expansion has created pressure on our environmental systems. We have arrived at a point where species extinction is happening. If we do not maintain our environmental support systems then we likely follow the path of the smelt! This fight is all about the water and how to create a justifcation to tap every last drop by getting public opinion to sway back in favor of constructing dams on the remaining rivers IMHO.

ejanea's picture
ejanea
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Re: Daily Digest - July 27

 I agree about television and the ads.  I'd suggest looking at adbusters.  I agreee with mainecooncat that ads are the worst part of all.  

I also think that advertisements on television are a significant contributor to the epidemic of depression  (heaps of people that I know have decided never to stop taking their antidepressants!)

Ads are designed to make you feel bad but convince you that you'd feel better if you bought whatever they are  offering... food, clothing, household stuff or the latest model car or whatever.  Of course, the actual itemdoesn't actually do much for your mood in the long term, particularly when after 20 minutes there is another ad to watch and another solution to the problem!  But still the ads are designed to undermine your own sense of satisfaction.   People used to say I'd lost my marbles when I said (40 years ago) that advertising should be illegal.  Some of them are beginning to question my suggestion now, and where my marbles might have gone.

I actually do have a television, but we are lucky to have one television station that has no ads so that I can watch the news and weather broadcasts and then turn it off.

 

Jane

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ronmeisels
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Re: The big print giveth

It's all playing with numbers!

If only one house was sold in May and two in June it would be "New Home Sales Double in June!"

hucklejohn's picture
hucklejohn
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Water shortage

Thanks Ckessel for your perspective on the water shortage in the California Central Valley.  I live in southern California.  There is so much to know about the water situation in California that it is hard to get a handle on the big picture given the variety of interests.  I recall  there is both an older federal water project for California as well as a relatively newer State Water Project.  And I believe Los Angeles is still drawing water from Arizona.

NLP's picture
NLP
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Posts: 51
Re: Water shortage

I won't argue the consequences and abuses of growth related to water supply.  However I RARELY find anyone mention an imporant difference between SoCal homeowners and NoCal homeowners; in SoCal we have water meters on our homes billing us exactly by the cubic ft. every billing cycle.  We know exactly how much we use and how much we need to conserve. 

Many municipalities require double plumbing of new construction to provide non-potable water for outside use (which makes up 70% of daily household use by industry standards).  Water reclaimation/recycling facilities are returning non-potable back to the water tables to filter and reuse again and again. Sustainability plans are in place for many water agencies in SoCal as it is clear that importing water from NoCal or our own sources of groundwater are not limitless.  I heartily encourage readers to visit www.yvwd.dst.ca.us/sustainability to see how the Yucaipa Valley Water District manages water resources in my area.

By contrast, most of NoCal homeowners do not have water meters.  It is a mystery to me how water consumption is billed or accurately measured per household. 

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